Australia: Background and U.S. Relations

Australia: Background and U.S. Relations

Bruce Vaughn Specialist in Asian Affairs Thomas Lum Specialist in Asian Affairs December 14, 2015

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Australia: Background and U.S. Relations

Summary

The Commonwealth of Australia and the United States enjoy a very close alliance relationship. Australia shares many cultural traditions and values with the United States and has been a treaty ally since the signing of the Australia-New Zealand-United States (ANZUS) Treaty in 1951. Australia made major contributions to the allied cause in the First and Second World Wars, and the conflicts in Korea, Vietnam, Iraq, and Afghanistan. During his visit to Australia in 2011, President Obama announced the rotational stationing of U.S. Marines in northern Australia. This initiative and others, which are viewed as part of the United States' rebalance to Asia strategy, have continued to develop through the annual Australia-U.S. Ministerial (AUSMIN) process. A cornerstone of Australia's strategic outlook, which is shared by the leading political parties, is the view that the United States is Australia's most important strategic partner and is a key source of stability in the Asia-Pacific region. The ANZUS alliance also remains very popular with the Australian public.

While Australia has a complex array of relations with many state and non-state actors, its geopolitical context is to a large extent defined by its economic relationship with China and its strategic relationship with the United States. Australia's political leadership believes it does not have to choose between the two and that it can have constructive trade relations with China while maintaining its close strategic alliance relationship with the United States. However, a fundamental shift in the geostrategic architecture of Asia may be underway as regional states may be hedging against the perceived relative decline of U.S. power in the region. This is one interpretation of what is behind the recent strengthening of ties between Australia and Japan and between other regional powers in Asia. Australia also plays a key role in promoting regional stability in Southeast Asia and the Southwest Pacific, and has led peacekeeping efforts in the Asia-Pacific, including in Timor-Leste and the Solomon Islands.

Under the former Liberal Party government of John Howard, Australia invoked the ANZUS treaty to offer assistance to the United States after the attacks of September 11, 2001, in which 22 Australians were among those killed. Australia was one of the first countries to commit troops to U.S. military operations in Afghanistan and Iraq. Terrorist attacks on Australians in Indonesia in the 2000s also led Australia to share many of the United States' concerns in the struggle against Islamist militancy in Southeast Asia and beyond. Australia is part of the global coalition to defeat the Islamic State (IS). There are renewed concerns in Australia about domestic Islamist terrorist threats due to the resurgence of Islamist militancy and in light of recent attacks in Paris and San Bernardino. Dozens of Australians are believed to have gone to fight for the Islamic State.

The Australian economy has done relatively well when compared with other developed economies in recent years. Its economic growth rate has been approximately one third faster than that of the United States over the past 20 years. Australia's developing trade relationship with China has been a key source of growth. However, there is an ongoing debate in Australia on where the Australian economy is headed as commodity prices slide and the "China boom" subsides. While profits from iron ore and other mineral exports to China may slow, other emerging exports including exports of Australian liquefied natural gas (LNG) potentially to a more diversified set of export partners may provide a continuing source of growth. Australia, which has signed free trade agreements with the United States, South Korea, Japan, and China, is a signatory of the 12-nation Trans Pacific Partnership (TPP) agreement that was concluded in October 2015. Despite criticism from some labor groups and economic interests, both major Australian political parties support the TPP arrangement.

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Australia: Background and U.S. Relations

Contents

U.S.?Australia Relations: Background and Recent Developments................................................. 1 U.S.-Australia Force Posture Agreement .................................................................................. 2 AUSMIN 2015 .......................................................................................................................... 3 2015 International Forums: G-20 Meeting, APEC Summit, and Climate Change Conference ............................................................................................................................. 4

History and Politics ......................................................................................................................... 5 Government Structure ............................................................................................................... 6 Political Developments ............................................................................................................. 6

The Alliance .................................................................................................................................... 7 The ANZUS Alliance and Changing Strategic Contexts........................................................... 7 U.S. Arms Sales to Australia ..................................................................................................... 8

Australia's Strategic Outlook .......................................................................................................... 8 Strategic Geography.................................................................................................................. 9 The Indo-Pacific ................................................................................................................. 9 Defense Policy ........................................................................................................................ 10 Defense White Paper..........................................................................................................11 Foreign Affairs .........................................................................................................................11 Australia's Identity and Asia..............................................................................................11 Indonesia ........................................................................................................................... 12 China ................................................................................................................................. 13 Japan ................................................................................................................................. 15 India .................................................................................................................................. 16 The Pacific ........................................................................................................................ 17

Australia, Islamist Militancy, and Counterterrorism ..................................................................... 18 Economic and Trade Issues ........................................................................................................... 20

Australia "Beyond the Boom"................................................................................................. 20 U.S.-Australia Trade and Investment ...................................................................................... 21

Trans-Pacific Partnership .................................................................................................. 21 Looking Ahead .............................................................................................................................. 22

Figures

Figure 1. Map of Australia............................................................................................................. 23

Tables

Table 1. Australian Senate Composition.......................................................................................... 6

Contacts

Author Contact Information .......................................................................................................... 23

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Australia: Background and U.S. Relations

U.S.?Australia Relations: Background and Recent Developments

Australia's strategic position has moved from peripheral, as it was during the Cold War, to central as the globe's geopolitical center of gravity shifts to Asia and the Indo-Pacific region.1 During the

Cold War the Fulda Gap and Central Europe were of central concern to strategic analysts while

today the Straits of Malacca and the maritime trade and energy routes of the Indo-Pacific are.

While developments in the Middle East and Europe will continue to demand the attention of the

United States and others, the potential for conflict in the Indo-Pacific region positions Australia in

an increasingly strategic corner of the globe. Because of this, some have gone so far as to assert that the U.S.-Australia relationship may be the United States' "special relationship" of the 21st century.2 At the 2011 Australia-U.S. Joint Ministerial (AUSMIN) meeting, then-Secretary of State

Hillary Clinton stated the "ties between our two nations are as close as any in the world," while

then-Foreign Minister Rudd stated, "No one can overestimate the importance of the sharing of common values" when discussing the alliance.3 The Obama Administration announced in 2011 a

"strategic rebalancing" of U.S. foreign policy priorities to the Asia-Pacific region, an approach

that entails deeper diplomatic, economic, and security engagement with Asia-Pacific countries.

Australia, a traditionally staunch U.S. ally, has in recent years strengthened its long-standing alliance with the United States. This was demonstrated by former-Australian Prime Minister Tony Abbott's October 2014 decision to send eight Super Hornet fighter/bomber aircraft, 200 special forces and 400 support troops to the United Arab Emirates to join the coalition forming to halt the advance of Islamic State (IS) militants in Iraq.4 The United States and Australia share strategic interests in the Indo-Pacific region and globally and have worked closely together to promote their goals and objectives. Australia's worldview overwhelmingly sees the United States as a force for good in the world and in Australia's Indo-Pacific region. There is also strong bipartisan elite and popular support in Australia for bilateral defense cooperation with the United States.

Cultural Ties

The close relationship is also highlighted by the popularity of Australian performers, artists, and authors in the United States. The success of Australian actors and actresses in America dates back to Errol Flynn and more recently is demonstrated by Nicole Kidman, Cate Blanchett, Hugo Weaving, Mel Gibson, Geoffrey Rush, Eric Bana, Hugh Jackman, and Heath Ledger. Australian musicians and performers such as AC/DC, Midnight Oil, INXS, Kylie Minogue, John Williams, Dame Edna, and Dame Joan Sutherland are also popular in America, as are Australian authors such as Thomas Keneally, Jill Ker Conway, Peter Carey, Robert Hughes, Germaine Greer, and Patrick White.

Australia's continuing emphasis on its relationship with the United States makes it a valuable partner of the United States in the IndoPacific region. Australia's political leadership does not see Australia's economic relationship with China, which has

1 Rory Medcalf, "A Term Whose Time Has Come: The Indo-Pacific," The Diplomat, December 4, 2012. The IndoPacific is generally considered to encompass the Indian Ocean and western Pacific maritime and littoral regions. 2 Jim Thomas, Zack Cooper, and Iskander Rehman, "Gateway to the Indo-Pacific: Australian Defense Strategy and the Future of the Australian Alliance," Center for Strategic and Budgetary Assessment, 2013. 3 "Transcript of Joint Press Conference with Defence Minister Stephen Smith, Foreign Minister Rudd, U.S. Secretary of State Hillary Clinton and U.S. Secretary of Defense Panetta," San Francisco, September 15, 2011. 4 "Islamic State: Abbott Warns Troops May Be Forced to Fire in Iraq," ABC News, September 17, 2014.

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Australia: Background and U.S. Relations

been its largest trading partner since 2009, and its strategic relationship with the United States as incompatible.5 While 31% of Australians polled in a 2014 public opinion survey by the Lowy Institute6 viewed China and Japan as Australia's "best friends" in Asia, 48% of those polled believe China is likely to become a military threat to Australia in the next 20 years. In the same Lowy Institute poll, the alliance with the U.S. was found to remain important to Australians, with 78% polled stating that it is either very important (52%) or fairly important (26%).7 A 2011 Lowy Institute poll of Australian public opinion found that 55% of Australians favored allowing the United States to base military forces in Australia.8 There appears to be support in Australia for close relations with Anglosphere countries.9 In one 2013 poll on Australian attitudes towards select countries, Australians ranked Great Britain first with a rating of 77 and the United States 70, as compared with China, 54; Iran, 38; and North Korea, 31.10

U.S.-Australia Force Posture Agreement

Former-Prime Minister Tony Abbott met with President Barack Obama in Washington in June 2014. After their meeting they announced the U.S.-Australia Force Posture Agreement. In joint remarks with Abbott, Obama stated the following.

There are a handful of countries in the world that we always know we can count on, not just because they share our values, but we know we can count on them because they have real capacity. Australia is one of those countries. We share foundational values about liberal democracies and human rights, and a world that's governed by international law and norms. And Aussies know how to fight, and I like having them in a foxhole if we're in trouble.11

Statements issued at the time also pointed to bilateral cooperation in the areas of cyber defense and cyber security incident response and expanded cooperation on ballistic missile defense (BMD) in the Asia-Pacific region.12 A bilateral working group is to look at ways Australia can contribute to a BMD system.13 Such a system could network U.S., Australian, and allied assets to increase shared capabilities and could potentially include the Australian Jindalee Over the Horizon Radar.14 (For more on BMD, see CRS Report R43116, Ballistic Missile Defense in the Asia-Pacific Region: Cooperation and Opposition, by Ian E. Rinehart, Steven A. Hildreth, and Susan V. Lawrence.) The HMAS Hobart is the first of three Australian air warfare destroyers with the Aegis missile defense system. It is expected to come into service in 2016.15 The reported expansion of a base near Geraldton, West Australia, would upgrade access to a next generation

5 "Australia," The Economist Intelligence Unit, Country Report, June 2013. 6 The Sydney-based Lowy Institute is one of the leading public policy institutions in Australia. 7 "The Lowy Institute Poll 2014," . 8 Fergus Hanson, "2011 Lowy Institute Poll," . 9 The Anglosphere concept includes Australia, the United Kingdom, the United States, New Zealand, and Canada. 10 "The Lowy Institute Poll 2013," . 11 Office of the Press Secretary, The White House, "Remarks by President Obama and Prime Minister Abbott," June 12, 2014. 12 The White House, Office of the Press Secretary, "The United States and Australia; An Alliance for the Future," June 12, 2014. 13 Brendan Nicholson, "Joint Plan to Take Out Missiles," The Australian, August 13, 2014. 14 John Kerin, "Iraq Leads the Agenda," Australian Financial Review, August 14, 2014. 15 Greg Sheridan "US Plan to Fire From Our Ships," The Australian, August 9, 2014.

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